Gov’t Urged to Join TPP

May Kunmakara and Vincent MacIsaac / Khmer Times No Comments Share:

Business leaders and economists are urging Cambodia to prepare to join the Washington-brokered Trans-Pacific Partnership (TPP) in order to sustain export growth and avoid being at a disadvantage to neighboring countries competing for access to the massive free-trade zone the TPP will create if it is enacted.  
 
The appeals began following a visit to Washington by top-level officials from the Ministry of Finance and Economy and the Commerce Ministry to discuss trade-related issues, including the TPP, with officials at the US Trade Representative Office and other US government agencies in late November. 
 
These discussions are expected to continue when US Secretary of State John Kerry visits Phnom Penh next week, officials said yesterday.
 
The TPP will cut barriers and establish common trade standards for 12 countries: the United States, Australia, Brunei, Canada, Chile, Japan,
 
Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Four members of ASEAN – Brunei, Malaysia, Singapore and Vietnam – are also members of the TPP. 
 
Ros Seilava, under-secretary of state at the Ministry of Economy and Finance said during a gala dinner on Saturday that Cambodia has been considering joining the TPP since meeting with officials in Washington to discuss the TPP and other trade-related issues in November.
 
Mr. Seilava said Cambodia was participating in numerous bilateral and multilateral trade discussions and although it had not signed on to the TPP it would eventually be part of it.  
 
“Maybe the initial step, is that we will have unofficial engagement and later on we will consider a formal… application [to join the TPP],” he said. 
 
After the gala dinner, Mr. Seilava said Cambodia had been invited to consider joining the TPP and that a working group at his ministry was examining the benefits and drawbacks of joining the TPP as well as other bilateral and multilateral trade initiatives.
 
A public affairs officer at the US Embassy to Phnom Penh yesterday tweeted that a Khmer Times report on Monday quoting Mr. Seilava was false. “Cambodia has not been invited to join TPP,” the tweet said.   
 
The embassy later responded to questions from Khmer Times by directing them to the US Trade Representative Office in Washington. “The US Embassy is not aware of any invitation at this time for Cambodia to join the TPP,” it added. 
 
Documents obtained by Khmer Times yesterday afternoon, however,  indicate that at least two senior US trade officials suggested that Cambodia join the TPP. The offer was made at a meeting between Cambodian and US officials on November 30 in Washington, according to a report sent from the Commerce Ministry to the Prime Minister’s Cabinet, which included minutes of the meeting. 
 
The Cambodian delegation was led by Commerce Ministry Secretary of State Pan Sorasak, while US officials at the meeting included Assistant Secretary of State for Economic and Business Affairs Charles H. Rivkin and Assistant US Trade Representative for Southeast Asia and the Pacific Barbara Wiesel, according to the report.
 
Mr. Rivkin told the Cambodian delegates that the country should consider joining the TPP, and he outlined the process for doing so, according to the minutes of the meeting taken by the Cambodian side. 
 
Ms. Weisel also called on the Cambodian representatives to join the TPP, and said further discussions would be held this year, the minutes read. 
 
After the US Embassy was requested to comment on this document it said that one of its staff was present at the November 30 “Competitiveness and Growth Dialogue” meeting in Washington. “During the CGD, one of the agenda items was regional economic integration, which included TPP,” the embassy said. 
 
“The priority now for TPP is getting the agreement through the respective processes of all 12 ‎existing TPP members. Regional economies that are interested in joining may want to review the text and consider their readiness to adopt TPP’s ambitious commitments. ‎We welcome additional discussions with Cambodia on how we can deepen our trade and investment relationship,” it said.
 
The tweeting public affairs officer also distanced the embassy from his tweet. “My Twitter account is personal,” Jay Raman said in an email.
 
News of talks on Cambodia joining the TPP is no secret in the business community here.  David Van, managing director of Bower Group Asia (Cambodia), told Khmer Times yesterday that he had been told that Washington had suggested that Cambodia join the TPP during the November meeting, but certain hurdles would have to be overcome first.
 
Mr. Van noted that all 12 current members of the partnership are also members of APEC, an association that Cambodia does not belong to. The current members of the TPP will have to agree to Cambodia’s inclusion in the partnership, Mr. Van said. He said that Cambodia would also have to conclude a bilateral investment treaty (BIT) with the United States before it could be included in the TPP. 
 
“Cambodia is a small and open economy and we already opened up everything when we joined the WTO so joining the TPP and concluding a BIT with the US should not be hard,” he said. Cambodia and the US agreed to begin exploratory discussions for a potential bilateral investment treaty in 2012.  
 
Chheang Vannarith, a lecturer of Asia Pacific politics at the University of Leeds in the United Kingdom (and a contributor to Khmer Times) said yesterday that joining the TPP will be beneficial to the Kingdom. 
 
“The TPP is the gold standard for free trade agreements,” he said. “As a small country and small economy, trade openness is critical to Cambodia.” 
 
“Cambodia needs to study the TPP carefully to identify opportunities and challenges,” Mr. Vannarith said, adding that the country needs to accelerate institutional reforms and increase its capacity for export in order to benefit from the TPP.
 
What Cambodia will gain from the TPP is market access for garment and footwear exports as well as agricultural products, Mr. Vannarith said. 
 
Ear Sophal, associate professor of Diplomacy and World Affairs at Occidental College in Los Angeles, agreed that joining the TPP would improve the business environment and expand opportunities for the country to expand trade. 
 
“Cambodia should join the TPP if it makes sense,” said Mr. Sophal, adding that Cambodia’s inclusion in the partnership was more important to Cambodia than it was to the United States.  “Cambodia is small potatoes [compared] to the US,” said Mr. Sophal, who is also the author of “Aid Dependence in Cambodia: How Foreign Assistance Undermines Democracy.” 
 
Mr. Sophal said the TPP might help reduce corruption in Cambodia because it allows corporations to sue the government for violations of the partnership agreement outside of Cambodia’s court system. “If it’s in Cambodia’s courts, forget it. The authorities will always win,” he added.
 
“Foreign corporations would be empowered to bypass domestic courts and directly ‘sue’ the government before a tribunal of private lawyers that sits outside of any domestic legal system,” he added. 
 
Mr. Vannarith said that joining the TPP could be time consuming, and that during this process Cambodia could lose export competitiveness to rival exporting counties like Vietnam, which are already part of the TPP. 
 
“It will take few more years for Cambodia to get ready… Vietnam is the main competitor for Cambodia’s export to the US market,” he said. 
 

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